KARACHI: The Pakistan Stock Exchange (PSX) benchmark KSE-100 index continued going north with 2.1 percent gains closing this week ended February 01, 2019 at 41,113 points. Participation, also increased during the week with average daily trading volumes increasing by 3.8 percent to 175 million shares/day, while traded value declined by 5.8 percent to $49 million/day. “Net foreign buying continued with $12.3 million totaling for the week, adding to $19.7 million during 2019 so far, broadly witnessed in the banking sector,” Amreen Soorani at JS Global Capital said. [the_ad id="31605"]During the week, the government announced a reduction in the prices of petrol by Rs0.59/litre while the price of HSD remained unchanged. Additionally, Economic Coordination Committee approved the launch of Rs200 billion sukuk to help partially clear mounting circular debt in the power sector. Furthermore, the government has imposed a moratorium on the establishment of new oil marketing companies (OMCs) until it increases the minimum investment requirement for future investors. Also, Kia Lucky Motors Pakistan Limited (KLM) announced that it will begin commercial production of vehicles by September 2019. On the macro front, foreign exchange reserves of State Bank of Pakistan (SBP) increased by $1.5 billion to $8.2 billion, up by 23 percent, owing to the inflows received from UAE and Saudi Arabia during the week. In a bid to further suppress the demand in order to stabilize the economy, SBP increased the policy rate by 25bps to 10.25 percent. The central bank also trimmed its forecast for economic growth for FY19 citing a weaker outlook for public finance and external imbalances weighed to the downside. In order to secure much-needed foreign exchange reserves to stabilize the country’s economy, the government launched “Pakistan Banao Certificates” to tap into the savings of overseas Pakistanis. Moreover, the ratings agency Moody’s Investor Service, termed the mini budget measures insufficient to curb fiscal deficit, where the country’s fiscal deficit is expected to reach 6.0 percent of GDP. “With all eyes set on the Saudi Crown Prince Mohammad Bin Salman visiting Pakistan on February 16, 2019 and reportedly signing trade deals amounting $18 billion, positive sentiment amongst investors is likely to prevail,” a report issued by Arif Habib Limited said. Moreover, foreign inflows are anticipated to continue keeping in view the government’s efforts to revive the economy and attract FDI. “Therefore, we expect the market to remain positive next week”.